The Dow Jones industrial average added 163.74 points, or 0.9 percent, to 18,293.70.
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On Thursday, the ICE U.S. Dollar Index, a measure of the greenback against six currencies, was trading 0.3% lower shortly after gold futures settled.
The updated individual Fed forecasts for 2016 revealed GDP lower at 1.7 percent to 1.9 percent, from previous forecast of 1.9 percent to 2.0 percent, unemployment rate at 4.7 percent to 4.9 percent, from 4.6 percent to 4.8 percent and PCE inflation at 1.2 percent to 1.4 percent, from previous estimates of 1.3 percent to 1.7 percent.
United States technology shares were strong, with Apple rising 0.9 per cent, Amazon 1.9 per cent and Google parent Alphabet 1.4 per cent. Heating oil added 2 cents, or 1.7 percent, to $1.43 a gallon.
But there were also three votes for a rise in rates on the Fed’s policymaking committee and that helped bring the dollar back into positive territory on Thursdsay, up 0.4 percent from Wednesday’s close in NY at 100.73 yen.
IPCA-15 came much weaker than expected at 0.23%m/m, 8.78%y/y, helping the DI market to fall further with Jan 17 down 4bps to 13.85% and Jan 21 is down 16bps to 11.73%.
“It’s another example of the issues facing investors right now, particularly pension funds and retirement funds, that they are all chasing yield in the same places”, said Ian Winer, co-head of equities trading at Wedbush Securities.
Still, with any policy moves unlikely until after the upcoming U.S. election, the regulator is left in an ambiguous position, amid the rising concern of monetary policy efficiency and Fed credibility.
While he said he was optimistic about the long-term prospects for gold prices, the fact the Fed was likely to next raise interest rates in December 2016 would be a near-term negative for the yellow metal.
The central bank said economic conditions were improving, but the recent slack in the labor market and inflation running below its 2 percent target gave it reasons not to pull the trigger this time.
“Many people expected the BOJ not to take any action at all, and the yen to strengthen, so we now see many people buying the dollar back”, he said.
U.S. West Texas Intermediate (WTI) crude futures settled up 98 cents, or 2.2 per cent, at $46.32 a barrel. Brent crude, used to price worldwide oils, rose 95 cents, or 2.1 percent, to $46.83 a barrel in London.
Energy companies climbed 1.5 per cent, tracking a rally in oil after Algeria said OPEC may turn its informal talks next week into a formal session. Murphy Oil rose $1.14, or 4.3 percent, to $27.55 and Transocean rose 51 cents, or 5.6 percent, to $9.65.
At the risk of oversimplifying, prices of other financial instruments, financial instruments that also compete with gold, fluctuate far more than a quarter-percentage point, not just from day-to-day but even intra-day!
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European markets followed Wall Street and Asia’s lead with Britain’s FTSE 100 climbing 0.6% and Germany’s DAX and France’s CAC 40 both rising a full 1%. Newcrest Mining jumped 6.9 percent.
